Global oil demand will rise a few MM b/d to 2030, peak, then quickly fall in 2 of 3 scenarios. My money's on the middle scenario.
Big picture: road transport falls b/c EVs, petchem/aviation rise but not enough to offset the decline.
This is consistent w/my expert interviews.
13 sectors that rely on oil will face a more complex transition than expected just a couple of years ago.
Substituting capital stock (oil consumption) will be complex and lengthy due to competitive advantages of oil in multiple transportation sectors and industrial processes.
Oil demand will rise further in the medium term as low-carbon alternatives not yet sufficiently developed/economically competitive to offset growing demand for transportation, industrial services.
Demand remains "sticky."
Oil demand revised higher in all three scenarios on stronger petchem assumptions
Increasing equilibrium oil prices in all scenarios in the long-term
Fast shift to EV quickly alters vehicle and trucks fleet, reducing oil demand in Mean
Speed bumps:
*lack of mass-market EVs outside of China
*poor charging infrastructure
*low consumer acceptance in some regions
*charging insecurity
*withdrawal of subsidies in some countries.
Petrochemicals is the largest driver of global oil demand growth in next 2.5 decades
Demand for plastics is set to surge b/c expanding global middle class.
Oil and natural gas liquids (NGLs) will be feedstock used to produce plastic.
Recycling only 8% of plastic consumption.
Maritime shipping requires a fuel with high energy density, safe storage and transport and a well-established supply chain.
Alternatives like ammonia and methanol may satisfy some of these requirements, but they are not yet competitive.
Aviation still lags, but alternative fuel demand is promising.
Sustainable aviation fuel (SAF) has potential to grow significantly during the 2030s and beyond, it will not significantly impact aviation in the next 5 years.
Between now and 2050, the oil industry will need to produce:
*700 billion under 2.2°C scenario
*550+ billion barrels under 1.9°C scenario
*440 billion under 1.6°C scenario
Shifts in product demand to drive significant changes in refining landscape.
Demand for traditional products is decreasing, while the need for petrochemical feedstocks like naphtha and liquified petroleum gas (LPG) is rising.